Tag: Local Government

More Taxes? No Thanks

Mayor Outlines Possible New Taxes

 

I saw this morning that the Mayor is effectively looking at a Poll Tax to either replace or supplement the current rating system (property tax) Council uses to raise revenue.

From Stuff:

Brown’s bold tax plan

Making all Aucklanders pay a council income tax may help elderly people in affluent areas who can’t afford their rates, mayor Len Brown says.

The current system is “inherently unfair” on people living on fixed incomes and paying high rates because of the value of their properties in areas like Devonport-Takapuna, Brown says.

Introducing an income-related tax for local council services that everyone pays is an option, he says.

Only property owners pay rates but the council is spending money on infrastructure and services for everyone, Brown says.

He believes the only way to mitigate the rates burden as property prices rise is to rethink how local government is funded.

Brown won’t express a view on what alternative might work saying he is “quite open minded”.

Options could include funding through income tax, GST, user pays charges, or bed taxes from hotel.

—-ends—-

 

Last time a poll tax got mentioned it cost Maggie Thatcher her Prime Ministership in 1990 to John Major. While we do need to think how Local Government is funded in New Zealand such as all GST collected from rates is given straight back to the Council rather than Central Government keeping it (Australia has a GST sharing arrangement between the Federal Government and the State Governments) I believe priority one is getting our expenses in line first.

Debt moving from 175% to 275% to me is unacceptable by all means. If we need to go that high then it seems it might be time to take the ruler and red pen over expenditure. I was given an alternative to how the budget should be set for Council by an elected representative once. The idea was quite intriguing in using a big massive white board at the back of the chamber where the Councillors meet (so where the food sits) with revenue down one side and expenditure (OPEX and CAPEX) down the other. Everyone can see it, everyone can comment on it, but the sole key requirement was you did the income first then the expenditure to match the income. Not the current method of do the expenditure first then find the income to cover it. With the board present it would serve as a constant reminder if you want something can the revenue cover it – if not what needs to “go” first. Pretty much this is what households and businesses do – or rather should do (our savings and debt is nothing to crow about)

 

So I am rather cool on the Mayor’s announcement on new funding mechanisms when our current budgets are disjointed as they are.

 

Just a quick note on another Orsman piece this morning I noticed he was going on about the City debt lifting by $74 million currently. A reminder that $60 million of that is the Colin Maiden Park purchase from the University of Auckland to ensure Auckland continues to have green space as it grows. So not as alarming as it was portrayed this morning as that $60m will continue to pay dividends for generations to come.

 

Reaction to the EY Report

Government needs to tighten up the “rules”

 

This is a rare piece of commentary from me personally into the entire “Len Brown affair.” Since the story broke I have been more or less silent on the “affair” aspect while constantly keeping an eye on the “conduct” side of the matter. From Day One when the story broke (while returning from a Council briefing on I believe it was on the Unitary Plan heading for notification) I have always said for me to no longer give “support” to the Mayor, he would have to conduct a criminal act (and be convicted) or conduct serious misconduct (an affair is not misconduct) through misuse of resources or power, and/or other serious nature.

I have the EY report that was commissioned by Council CEO Doug McKay after it landed (with an accompanying release) in my email box this afternoon. You can read the report over at this post here: The EY Report Commissioned by Auckland Council CEO. That said I was NOT at the Press Conference in Town Hall this afternoon over the release of the report.

 

After receiving and reading the report I have come to three conclusions:

  1. The “rules” set by the Council Code of Conduct,  that by the Remuneration Authority, and the Local Government (Auckland Amendment) Act 2009 are too loose with little measures provided if something does go wrong/breached
  2. Government must tighten up the regulations set about by the Remuneration Authority for issuing rules around use of ratepayers resources – e.g the mayoral car and when it can be used or not. In the same regard the Local Government Act needs tightening up so the Governing Body have available a wide range of measures to deal with errant elected members. This can range from a Censure motion to something more punitive (whatever one decides that might be short of sacking a mayor)
  3. Owing to this error in regards to several matters pointed out in the EY report (cell phone, mayoral car, and not declaring the hotels on the register)(and rather than the actual affair) my confidence in the mayor is shaken with support moving from positive to negative. That said I still have confidence and positive support in the wider main Council (although a particular CCO is an exception at the moment) and the rest of the elected members (regardless of whether I agree with them or not (Dick Quax and Cameron Brewer)). In being honest it has weighed on my mind on what else has the mayor not declared outside of the “affair” and could have this affected any other mayoral decision-making

 

I stress again to make it crystal clear that yes confidence in the mayor is shaken with support switching from positive to negative. HOWEVER, confidence and support remains with the Deputy Mayor and the rest of the Councillors despite disagreements from time to time. 

 

One thing I do ask of the Governing Body after the elected members have had time to review the EY report is that an extraordinary meeting be called of the GB ASAP! In that extraordinary meeting a motion of censure is called and voted for against the mayor immediately. Whether the vote passes or fails is beside the point in my opinion. The point being is that the Governing Body has now been damaged and in the eyes of the City the censure motion needs to occur to help restore confidence towards the Council. Failure to move the censure motion quickly could paralyse worthwhile projects before the Council – and that would be a true detriment to Auckland. It is risky

 

For the rest of it Parliament is going to need to haul backside and tighten up rules around Local Government to prevent this kind of mess from happening again. And to me that is going to be the main point coming out of this entire mess! 

 

The EY report